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Civionics to expand sensor pilot with local manufacturer

It's not uncommon for tech startups to pivot in their focus. Not all survive the decision. Ann Arbor-based Civionics seems to be thriving after such a choice. The company has gone from using its wireless sensor technology to measure the strength of large-scale infrastructure (think bridges) to monitoring the strength of the machines in factories.

"We couldn't find a market pain that was screaming out for our technology," says Gerry Roston, CEO of Civionics, explaining the pivot.

Civionics technology uses a prescriptive diagnostic method to monitor factory machines. The idea is to minimize downtime and wear and tear. It is currently deployed in a factory of a major local manufacturer (Roston declined to say which one) as part of a pilot project. Civionics three person team (it recently hired a new person) has grand ambitions for that pilot project.

"It's the first step in a long roll-out in the factory," Roston says. "The customer is sticking its toe in the water."

Civionics has also been participating in a number of local programs and competitions to grow its profile. Those include Automation Alley's 7Cs program, which helps local firms with manufacturing. Civionics also recently advanced to finals of Global Automotive & Mobility Innovation Challenge.

"Those warm introductions are extremely important," Roston says.

Source: Gerry Roston, CEO of Civionics
Writer: Jon Zemke

Personal tragedy inspires launch of U-M spin-out, Neurable

Making the world a better place is the kind of warm and fuzzy rhetoric tech entrepreneurs use when launching their new startup.

Ramses Alcaide wants to make the world a better place, too, but his inspiration comes from personal experience.

The University of Michigan PhD candidate is dedicated to developing technologies to assist people with physical disabilities because he witnessed first-hand the challenges of living with such disabilities. In particular, the hardships that faced his favorite uncle. That uncle, also a scientist, suffered an accident that immobilized his legs when Alcaide was a young man. His struggles stuck with the U-M grad student.

"I remember seeing him struggle to relearn how to walk with the archaic technology of the time," Alcaide says. "I thought there has to be a better way. But I had no idea what that was."

Those memories served as the inspiration for Alcaide's post doctorate studies and a new startup called Neurable. The University of Michigan spin-out is developing a non-invasive brain-computer interface that allows for real-time control of software and physical objects, allowing people to control wheelchairs, robots and even a car with no training.

Neurable currently has a working prototype of its technology and is working toward commercializing it next year. The startup aims to raise $500,000 in seed capital to make that happen and more.

"We have much bigger dreams," Alcaide says. "We want to make it into a full-fledged company."

It's off to a good start. Neurable, with the help of U-M's Zell-Lurie Institute, took second place in the Rice Business Plan Competition. That gave it $50,000 in seed capital, as well as up to $280,000 for the competition's OWL Investment Prize.

"I really wanted to bring this technology to the next level so I can help as many people as possible," Alcaide says.

Source: Ramses Alcaide, founder & CEO of Neurable
Writer: Jon Zemke

Corktown's Beard Balm goes global as it nears $1M sales

When Jon Koller first thought of turning his homemade beard balm into a business, he imagined how he would market it. Four years of business building and bootstrap pulling later, he gets to do that with Beard Balm.

And it's not just because Koller wants to do it -- he needs to. Beard Balm, based in Corktown's Ponyride, is selling its products around the world and closing in on $1 million worth of sales this year. Koller expects to hit the seven-figure milestone by the third quarter.

"We're about even now in sales with what we did all of last year," Koller says.

Beard Balm makes an all-natural, leave-in conditioner for beards and facial hair. The company uses natural products like lanolin oil, coconut oil, and beeswax from a Traverse City farm. Beard Balm sells in 1.5-ounce tins for $16 to $18 a pop. The regular balm and the "Naked," fragrance free version sell for $18 a piece. 

Since releasing its Heavy Duty version a year ago, Beard Balm has focused on expanding sales by hooking up with a national distributor. Beard Balm's products can be bought in every state in the U.S., every country in the European Union, and 12 other countries around the world. Beard Balm has tripled the number of stores carrying its products in the last two months.

"We will probably double it again in the next three months," Koller says.

That success has prompted Beard Balm to grow its team to five people, and will likely add more soon. New hires will do everything from production work to helping with marketing and branding.

"Everything but sales," Koller says.

Sales growth seems to be taking care of itself these days.

Nexcess adds two more data center support facilities in Southfield

Nexcess is doubling down on its commitment to Southfield, adding two new data center support facilities this spring and making plans for a new data center.

The 16-year old company specializes in providing IT, data center, and managed hosting services to companies large and small. It is currently in the latter stages of building out two data center support facilities that would double its footprint in Southfield.

"We like having our data centers near our people and our people near our data centers," says Chris Wells, CEO of Nexcess.

Nexcess has has data centers around the world, including in Dearborn, the United Kingdom, Australia and the Netherlands. While it's grown internationally, most of those jobs have been added in Metro Detroit. It currently employs 112 people and expects to add another 35 after it opens and staffs up its new facilities on Melrose Avenue in Southfield this spring.

Nexcess averages about 30 percent annual revenue growth. It has spent the last six years on the Inc 5000 list and the last three years on the Deloitte Fast 500 list. Because of this growth, its data center facilities working capacity has begun approaching its limits. 

"We're going to need to build a new data center soon," Wells says. "Our current Southfield data center is approaching 60 percent usage. It's starting to get a little tight."

Detroit tech community leads venture capital boom in Michigan

Michigan's venture capital community continues its rise with another year of growth, and Detroit's tech scene is playing a significant role.

With $328 million in 2015, Michigan enjoyed its best year of venture capital investment. That's up from $224 million the year before, and $246 million from the second highest year in 2012, according to a new report from the Michigan Venture Capital Association. In total over the last decade, Michigan has seen a 150 percent increase.

Detroit's rise as a center for tech mirrors that climb. There was little to no venture capital activity downtown 10 years ago. Today, it's home to several venture capital firms that make early stage investments in tech firms, many of which are based in or near Madison Block. One of Michigan's two largest VC funds, the Renaissance Venture Capital Fund, a fund so large it only invests in smaller VCs, is also located downtown.

"Detroit is a big area of focus," says Maureen Miller Brosnan, executive director of the Michigan Venture Capital Association. "Automotive and IT technologies are a great areas of growth."

VC growth is happening at a time when it's on the wane across the U.S. According to the same Michigan Venture Capital Association report, the number of venture capital firms headquartered in Michigan, their total capital under management, and number of venture capital investments made in Michigan, has doubled and in some cases tripled while those numbers have decreased nationally.

That build up has come from a combination of capital from private and public sources. While the Renaissance Venture Capital Fund has accumulated its money from private funds, it's counterpart the Venture Michigan Fund got its backing from government. The Michigan Department of Treasury helped establish local VC infrastructure over the last decade, including the Venture Michigan Fund, by providing investors with up to $450 million of tax-voucher certificates.

Future support from the state of Michigan, however, is not guaranteed. That doesn't mean anyone is deterred. Rather, they're striving for greater self-sufficiency.

"Firms are looking at this and saying we’re going to have to do this on our own," Brosnan says.

Detroit outpaces rest of southeastern Michigan for new residential unit permits

In prior decades, Detroit had very little new building construction. Not anymore, especially for residential units.

According to a report recently released by the Southeast Michigan Council of Governments (SEMCOG), Detroit issued more permits for new residential units than any other city in southeastern Michigan last year.

There were 913 residential units permitted in Detroit in 2015, more than double the second-highest city on the list, Ann Arbor, at 405 units. Canton, the only other city in Wayne County to make the top ten, came in third with 397 residential units permitted.

Of the 913 residential units permitted in Detroit, 97 percent were apartment and loft units. Broke down further, there were 882 apartment units, 17 condominium units, and 14 single family homes permitted in 2015.

According to the report, "Gains continued in apartment construction due to pent-up demand for rental housing from young professionals and downsizing households, low vacancy rates, and a growing job market."

Still, it's not all rosy in Wayne County. According to this Detroit Free Press article from March 28, 2016, new census numbers revealed that the county lost 6,673 residents between July 1, 2014 and July 1, 2015, the second highest population decline in the country. Only Cook County, Illinois lost more during that period. Though second place is better than first, which is what Wane County occupied for the previous eight years.

Detroit also far exceeded any other city in demolitions, razing 4,667 residential units in 2015.

Immigrant turns American Dream into own business in Pontiac

Hector Martinez came to metro Detroit with little more than a dream for a better life and some loose connections to the area. 20 years later, he's built his own a business and created jobs in Pontiac.

Trees&Co has established itself as a staple in the local tree-trimming market. It added two people over the last year, expanding its staff to five full-time employees and another four part-timers, and is looking to hire even more, for jobs ranging from arborists to climbers to groundsmen to sales reps.

"We have been building up our system and our equipment," Martinez says. "Now I feel like we are there. We have the customer lists and the equipment. Now we just need the people."

Twenty years ago Martinez wanted to be one of those people, a guy on someone's team working for an honest day's wage. In 1996, he moved from Puerto Rico to the mainland in hopes of finding a better life, and choose Pontiac because an acquaintance lived there and could make room for him.

Martinez worked at a Taco Bell for a few months until a friend complained about being quoted an arm and a leg to have a tree removed near his house. Martinez offered to give it a try for $100.

"I was able to cut the whole thing down without hitting his house," Martinez says. "He said you should do this for a living."

That was the start of Trees&Co. Martinez wasn't afraid of heights and liked working outside. He bought a chainsaw and started building up a customer base. Word of mouth made slow-but-steady growth possible over the years, allowing Martinez to turn the weekend side job into his full-time gig. Then he started hiring people. Today Trees&Co does $500,000 in gross revenue.

"I want to provide more work for more people," Martinez says. "We have the potential to make $2 to $3 million and provide more jobs in the community."

Clarity Quest Marketing capitalizes on patience, focus

For more than a decade, Christine Slocumb has been spreading the good word about her clients at Clarity Quest Marketing. And she has learned a thing or two about running a PR firm over that time.

"Don't worry about the first two years," Slocumb says. "The first two years are the most difficult. Also, over 15 years you will have a few years that are lean and mean."

Ann Arbor-based Clarity Quest is celebrating its 15th anniversary this month. The company has 20 employees and an intern between its home base in Ann Arbor and offices in Connecticut and Seattle. Its revenue is up 25 percent last year, and that's on top of a 23 percent increase the year before that. Slocumb wants to hit 30 percent revenue growth this year as her firm's work grows across the U.S.

"We have some of our first clients in Silicon Valley now," Slocumb says. "That's a region I always wanted to tap into."

Slocumb suggest other small companies focus on a handful of things to really grow and establish themselves: patience, perseverance, hard work and finding a niche. Clarity Quest Marketing has sharpened its focus in its later years to concentrate on work in healthcare IT firms. That specialization has really allowed the company to grow in recent years.

"That really paid off for us," Slocumb says.

Source: Christine Slocumb, president of Clarity Quest Marketing
Writer: Jon Zemke

Michigan venture capital growth outstrips national averages

Venture capital in Michigan has come a long way over the last 15 years, and a new report from the Michigan Venture Capital Association puts some numbers to that growth.

The Ann Arbor-based non-profit released its annual report this week showing growth with some impressive numbers for the venture capital in the Great Lakes State. Michigan enjoyed its best year for venture capital investment in 2015, clocking $328 million. That's up from $224 million the year before (it's third best year) and $246 in 2012, its second best year. Venture capital in Michigan is up 150 percent over the last decade, according to the report.

Michigan-based venture capital firms have $2.2 billion under management, up 47 percent in the last five years and more capital under management than ever before. Michigan venture investors finance nearly every Michigan venture-funded startup. The report concludes that local venture capital has gone from practically non-existent in Michigan 15 years ago to having firmly taken root and growing steadily.

"There are a lot of factors at play at this point," says Maureen Miller Brosnan, executive director of Michigan Venture Capital Association. "Venture capital has firmly established its role in as an economic driver in Michigan."

Ann Arbor is widely seen as the capital for venture capital activity in Michigan thanks to its proximity to the University of Michigan. There is also a large concentration of local VCs headquartered in Ann Arbor and a number of out-of-state VCs with offices in Tree Town.

The report also shows a rise in angel investing in Michigan. There are currently 128 startups in Michigan that have received funding from a locally based angel group, a 42 percent increase in the last five years. Membership in Michigan’s nine angel groups hit 294 investors, a 59 percent increase in the last five years. Michigan’s Grand Angels was listed among the three most active angel groups in the country, and a new angel group in the Upper Pennisula, Innovation Shore Angel Network, launched last year, according to the report.

"Grand Angels has set the pace for growth of the nine angel groups in the state of Michigan," Miller Brosnan says. "There has been tremendous growth there."

Source: Maureen Miller Brosnan, executive director of Michigan Venture Capital Association
Writer: Jon Zemke

Sizzles Burgers and Subs brings Mediterranean twist to downtown Ypsilanti

Many restauranteurs have grand ambitions for changing their local food scene with new foods and flavors, but almost all of them end up offering standard American staples like hamburgers, sandwiches and pizza.

Mohamed Fayed wants to put those two things together with his new eatery, Sizzles Burgers and Subs, in downtown Ypsilanti. He describes it as typical American fare with a Mediterranean twist.

"It will be burgers, subs and wraps with Mediterranean flavors," Fayed says. "It will be everything we are used to with fresh ingredients and a Mediterranean twist."

Sizzles Burgers and Subs is as much a new adventure for Fayed as it is a venture. The Dearborn resident came to the U.S. from Yemen at age six and grew up in Metro Detroit with family that had been here for generations. He graduated from Fordson High School in Dearborn, then the Michigan Institute of Aviation & Technology, and worked as a supervisor at Mitsubishi Hitachi Power Systems. Then he decided he wanted to be his own boss and open his own restaurant.

Fayed scanned Metro Detroit to find the right location. The right one for him turned out to be a tough one. He bought a small shoebox of a storefront in downtown Ypsilanti. 10 N Adams hasn't been occupied in the better part of a generation and it showed the day Fayed walked through it.

"It had a lot of clutter," Fayed says. "The ceiling had moisture. The paint was peeling. A lot of mold, but we have remediated that. It was just an all-around mess."

Fayed has cleared out the building with the help of his brother, Ali Fayed, and is working to take plans to the city for Sizzles Burgers and Subs this spring. The Fayed brothers are doing most of the work themselves to get it open.

"It's a big challenge," Fayed says. "There are a lot of hurdles we have to overcome."

But that doesn't mean the Fayed brothers haven't gotten a warm reception.

"I like the area," Fayed says. "Plus the people here are very friendly. They all came out and congratulated me."

Source: Mohamed Fayed, owner & operator of Sizzle Burgers and Subs
Writer: Jon Zemke

Toyota to build driveless vehicle R&D site in Ann Arbor

Autonomous vehicle research is all the rage, and Toyota is getting in on the action with a new R&D center in Ann Arbor.

Excerpt:

"Although the focus of each of the three strategically located facilities will be broad, each will feature a different core discipline.  TRI-ANN will focus primarily on fully autonomous (chauffeured) driving.  TRI-PAL will work on what may be termed “guardian angel” driving, where the driver is always engaged but the vehicle assists as needed. TRI-CAM will dedicate a large portion of its work to simulation and deep learning.

The Toyota Research Institute is an enterprise designed to bridge the gap between fundamental research and product development.  With initial funding of $1 billion, it has four initial mandates."

Read about it here.

And if you're interested in the ethical implication of autonomous vehicles, be sure to check out Dude, Where's My Driverless Car? The Ethics of Autonomous Vehicles, a conversation being held tonight (Wednesday) at the Michigan League, Henderson Room.

ASTI Environmental targets urban work with new downtown office

Put simply, ASTI Environmental is a company that specializes in urban restoration. So the decision for the Brighton-based firm to open an office in downtown Detroit, the center of urban restoration in Michigan today, seems obvious.

ASTI specializes in the technical side of urban redevelopment, such as working on incentives for real-estate development or brownfield redevelopment.

The firm is also no stranger to Detroit. Its first project in the city involved working in the Crystal Mines -- the enormous salt mines underneath Detroit -- 30 years ago. Since then, ASTI has played a part in 1,500 projects in Detroit, including the redevelopment of former Stroh's Headquarters into Stroh River Place on Jos. Campau.

"With our history in the City of Detroit since 1985, it's high time that we hang a shingle there," says Tom Wackerman, president of ASTI Enironmental. "We've been instrumental in so many redevelopment projects in the city and see a great future for Detroit as it redefines what it means to be an American city. I couldn't be more pleased to be in the middle of one of the Nation’s best urban comeback stories."

ASTI is opening up its Detroit office in another former Stroh building: the brewing company's former headquarters at 28 W. Adams in Detroit. The 19-story building is currently known as the Grand Park Centre building overlooking Grand Circus Park.

Local chip-maker expands its operations

Uncle Ray's is one of those bags of chips you can find in just about any party store or grocery in Detroit. But the people behind the potato chip maker are optimistic that it could become a go-to brand of chips in retailers across the country.

"We think Uncle Ray's has the kind of upside where we could double our current volume in the short-term," says Brian Gaggin, vice president of Uncle Ray's. "We could probably do that within five to six years."

Uncle Ray's is named for Ray Jenkins who started selling potato chips out of the back of his car in 1965. The chip maker became a wholly-owned subsidiary of The H.T. Hackney Co, one of the largest wholesale distributors in the U.S., in 2006. Uncle Ray's is now based on the city's west side, near the intersection of I-96 and Wyoming, where 175 of the company's 200 employees works. Over the last year, it's hired over 20 new employees for production work.

"About 80 percent of our employees are city residents," says Gaggin. "If our growth trend continues, we'll be adding even more people."

Uncle Ray's has lodged close to 20 percent growth over the last two years, expanding sales of its low-priced chips into a number of new retailers across middle America, including Michigan, Ohio, Indiana, Illinois, Kentucky, Missouri, Georgia and Alabama. They also recently signed a deal with Minor League Baseball to become the league's official potato chip.

"It's an ideal fit," Gaggin says. "It's a family event, a reasonably priced, family fun activity."

Systems in Motion becomes Nexient, doubles Ann Arbor office space, adds staff

Change has been in the air at the Ann Arbor office of Systems in Motion, and it's been a welcome transition. The California-based IT firm rebranded itself to Nexient, doubled its office space in Ann Arbor, and made a score of new hires locally.

"I could see us adding 100 people over the next 2-3 years," says Colin Chapman, chief delivery officer for Nexient. He adds, "I expect it (hiring) will pick up with the pipeline we have right now."

Nexient specializes in application development, information management and testing services. It uses an Agile software development methodology, which makes the creation of software viable through a system of incremental improvements. That system enables it to be cost-competitive with overseas companies, bringing more outsourced jobs back to the U.S. Nexient rebranded itself from Systems in Motion last spring in an effort to help it differentiate itself from other tech firms.

Nexient employs about 250 people in Ann Arbor after hiring 20 people over the last year. That hiring pace is a bit slower than in recent years because the company ran out of room at its offices.

"We were facilities constrained," Chapman says. "Our current building could only seat 230."

It did double its space early this year, taking over the lease in an adjacent space. Nexient went from 35,000 square feet to 75,000 square feet with that move. That should give it enough space to grow at an accelerate pace for the next two years.

"I expect the renovations (of the new space) to finish in the next month," Chapman says.

Source: Colin Chapman, chief delivery officer for Nexient
Writer: Jon Zemke

Knight Arts Challenge Detroit accepting submissions now through May 2

For the fourth straight year, the Knight Foundation will be awarding up to $3 million in grants to Detroit artists. The submission period begins today, April 4, and runs through May 2.

The Knight Arts Challenge has a broad concept, and is "open to anyone with an idea for engaging and enriching Detroit through the arts." The application is also simple. All you need to do is distill your project idea into 150 words and follow these three guidelines: 1) The idea must be about the arts. 2) The project must take place in or benefit Detroit. 3) The grant recipients must find funds to match Knight’s commitment.

Two of the 170 prior winners include Hardcore Detroit, which explored the ‘70s Detroit dance craze in a documentary, and Detroit Fiber Works, a gallery and learning space that claims to be the only fiber arts studio in Detroit. 

“Almost everywhere you go in Detroit, you see Knight Arts Challenge winners inspiring and engaging our city,” said Katy Locker, Detroit program director for Knight Foundation, in a press release. “What’s next? We can’t wait to see what Detroit comes up with.”

The Knight Foundation will host two free community events on April 11 at the MOCAD and April 15 at the Charles H. Wright Museum of African American History. The events are meant to support potential applicants, with past challenge winners and Knight Foundation arts program director Bahia Ramos in attendance. 

To submit your application to the challenge, click here
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